Reporting & Analytics

Financial statements – The Profit and Loss statement, Balance Sheet and account analysis are at the heart of a financial presentation, however, many times they are delivered after the optimum reaction time has passed. Additionally, the structure of the reports may not contain all the information owners find meaningful. Is month-to-date important; should year-to-date be compared to budget and projections and/or is a monthly analysis better? We start with a dialogue combining an understanding of the available data, industry standards and structure based on the experience of CFO 360. The production of meaningful multi-dimensional financial statements and operational reports becomes the standard and issued on a monthly basis.

Fixed vs. variable cost analysis – The review and analysis of traditional profit and loss budgets and projections are critical. Special attention to analysis and reconstruction of these statements into fixed and variable categories play a significant role in planning especially in economic times that exhibit shifting sales, clients, suppliers and industry trends. Intelligent growth (and in a reclining situation, downsizing) can only be achieved separating these two components from the overall picture.

Client profitability, departmental profitability, core business analysis, hourly rate analysis and revenue stream analysis – Once the financial statements are delivered and fixed and variable costs are analyzed, we need to understand where business is generated and how profitable that segment is. Each of the above listed components is invaluable. How profitable is each client, or how profitable is a product line or product category? What if we cross analyze clients and products? What is the capacity of the business to generate sales? All combinations need to be considered depending on the individualized need of the business and the industry. This is the basis for planning growth, staff, capacity, capital expenditures, working capital, board of directors’ meetings, potential new investors, mergers and acquisitions.

Core business analysis – is absolutely required where clients with more than one SBU (Strategic Business Unit) exists. This is especially true if the business unit is a newly developed venture. Focus needs to be maintained on the core, with the impact of each additional unit removed. Masking performance of the core or any SBU can produce misleading data and incorrect assumptions and business decisions. For example, an Ad agency devoted to traditional advertising needs to measure and separate the public relations arm from the digital/ social media component. Additionally, depending on the needs of the business, client profitability, departmental profitability, core business analysis, hourly rate analysis and revenue stream analysis may also be necessary to properly guide business planning.

Benchmarking – Enough can’t be said about the importance of benchmarking to compare your company’s performance against others your size. Monthly actuals, year-to-date actuals, projections and historical data are plotted against the business plan, key business and industry metrics. The results are not necessarily the goal. Nor are adjustments against the business plan always necessary. Rather, the value is in understanding why your business might be different from the industry. A variance is not necessarily a bad thing; it just needs to be understood. These trends need to be developed, agreed upon using client specific data points, charted and monitored for change on a semi-regular schedule.

There are many sources available to access this information, from trade associations, industry publications and other resources dedicated to gathering this data on a subscription basis. Obtaining and merging this information and analyzing its pertinence for your organization is our expertise.